Some 70 years or so ago if you had some spare time, chances are you would spend it at the cinema. Back then, Britons would visit the cinema about three times a month, where they were as likely to catch up with the news as to watch the latest film release. In 1946, box-office admissions were a massive 1.6 billion. However, after the post-war peak, TV took over the as the nation’s favourite medium and admissions slumped to 54 million in 1984.
But then the turnaround came. Admissions have been on an upward spiral for more than two decades and this is despite the soaring costs of spending a night at the movies. Receipts in 2012 rose six per cent year-on0year reaching £1.1bn, according to the British Film Institute.
This success has been reflected in the fortunes of Britain’s cinema businesses. The share price of Cineworld – the UK’s only listed cinema group – has grown from 95p in 2008 to over 375p. This summer the Vue chain was sold by a private equity group for £935 million, after being bought in 2010 for £450 million.
2012 owed most of its cinematic good fortune to a certain Mr Bond. After a slow start to the year which was blamed on the Diamond Jubilee celebrations, football’s European Championship and ultimately on the Olympics, Skyfall transformed box office fortunes and pulled admissions up to 172.5 million, the third highest level in the last 40 years. Skyfall also meant that Brit flicks led growth – UK films too £3.45 billion at the global box office, claiming a 15 per cent share of the international market
So 2013 has a hard act to follow. The early part of 2012 saw box-office takings drop making it easy for 2013 releases Les Miserables, Iron Man 3 and The Croods to give the year a good start, with gross box-office takings rising 8.5 per cent across H1 to £578.7 million. But for the rest of this year, the outlook is not as positive. The US has seen cinema attendance fall to a 25-year low and where US trends lead, Britain usually follows. Goldman Sachs has blamed a slump in the number of young visitors – attendance amongst the 12-24 age group has fallen by 40 per cent since 2002 – as well as the rise in digital downloads.
The cinema industry in this country disagrees however and claims that the likes of Netflix and Lovefilm can actually boost demand.
- “Downloads are not the competition,” says Rupert Gavin, chief executive of cinema group Odeon & UCI. “Cinema admissions have nothing to do with what people are doing at home. It’s the distraction of other events – the football, the Olympics, the weather – that affects people.”
- “That changes things week by week, but the underlying trend is that more and more people are going to the cinema. From the long-term statistics, you cannot spot when VCR or DVDs were invented, or when broadband penetration exceeded 50 per cent. All the landmarks from film distribution don’t feed through to box-office statistics. “
- “We’re always more worried about when the football starts, or when there’s a big final for X-Factor, than any distribution changes. Those are the things that impact whether someone’s going to sit at home or go out. Those who watch a DVD or download a film are actually among the biggest cinema goers.”
As for the future, the industry and cinema-goers alike are already talking about the forthcoming three Avatar movies, the next set of Star Wars recreations and Pixar titles and this shows that cinema’s future is strong. But it’s not just films that entertain us at the cinema these days, the next big game changer for the cinema industry is alternative content – live theatre, music and sporting events, no doubt the World Cup games involving England will find a home on the big screen in 2014. Diversity is coming and the cinema chains are working hard to keep up with a changing world, changing tastes and a changing population.
MEC Says
Content is king and as long as the studios continue to give us quality the cinema will always have a place in our hearts. Yes, we will never see the admission figures of the 1940s but the cinema continues to be a well-loved pastime and we don’t see that changing in the future. The main challenge is for the cinema chains to continue to justify their high prices, to demonstrate it represents good value and to diversify when and where possible.
For advertisers, cinema continues to deliver as it always has – offering engaged audiences, minimal ad avoidance, incremental reach, dual viewing and high levels of ad recall.